Shares of Prabhat Dairy slipped 10 per cent to Rs 71 in the early morning trade on the BSE on Monday after the company's board approved and recommended its delisting proposal, with a floor price of Rs 63.77 per share.
On September 5, the company had informed the bourses that it was mulling to voluntarily delist the equity shares of the company from stock exchanges. Between September 3 and 13, the stock of the packaged foods company had rallied 37 per cent, as compared to a 2.2 per cent rise in the S&P BSE Sensex.
“Certain members of the promoter group viz., Mrs Sarangdhar Ramchandra Nirmal, Mr. Vivek Madhyam Farming Solutions Private Limited and Nirmal Family Trust, (have) expressed their intention to acquire 48.7 million equity shares, representing 49.9 per cent of the equity --currently held by the public shareholders of the company--, and voluntarily delist the equity shares from the stock exchanges,” Prabhat Dairy said in a BSE filing on Friday after market hours.
"The company has recently completed the sale of its dairy business undertaking by way of slump sale along with the sale of its 100 per cent shareholding in Sunfresh Agro Industries (stepdown subsidiary of company) pursuant to a share purchase agreement to the Tirumala Milk Products, a wholly owned subsidiary of French dairy multinational Groupe Lactalis," the company reasoned.
After the business sales, the company is no longer operating in its core business, which contributed the majority of the revenues and profits of the company, it added.
“We understand and recognise that a majority of the public shareholders would have invested in the company, with the intention of investing in a company engaged in the dairy business,” Prabhat Dairy said in a filing.
The delisting of equity shares, the company said, would result in reduction of the ongoing compliance costs such as annual listing fee and fees payable to share transfer agents or such other expenses required to be incurred as per the applicable securities law.
Prabhat Dairy had raised Rs 300 crore through initial public offer by issuing shares at Rs 115 per share. The stock hit an all-time high of Rs 258 on December 2017 and all-time low of Rs 47 on February 2019.
At 09:25 am, the stock was trading 8 per cent lower at Rs 73 on the BSE, as against a 0.53 per cent decline in the benchmark index. A combined 190,985 shares have changed hands on the counter on the BSE and NSE so far.